Estate Administration

What is estate administration?

Estate administration is the process of winding up a person’s estate after they have died. Regardless of whether they made a will,  administration must be performed after every death unless there are no assets or all pass by survivorship.

The process itself covers a wide range of tasks. It includes identifying and gathering the person’s assets, paying debts and taxes, preparing Inheritance Tax forms, and distributing the net assets to those entitled to them.

Who deals with estate administration?

If there is a will, then the person named as executor is responsible for administering the estate.

If there is no will, the court probate registry will appoint an administrator to deal with the estate administration. The rules of intestacy determine who should take on the administrator’s role. Usually, this will be the deceased’s spouse or civil partner,  adult child or another close relative.

Executors and administrators have the same role and responsibilities; the only material difference is the name of the official probate documentation they receive and when they are able to start administering the estate. For executors, it is called a “Grant of Probate.” For administrators, it is called “Letters of Administration.”

Being named on the probate documentation gives the executor or administrator the legal authority to deal with the deceased’s estate. They can also appoint a professional, such as a solicitor or accountant, to help them handle some or all of the administration work.

What is involved in estate administration?

Every estate is different, and this makes it difficult to predict what could be involved. If you have been appointed as the estate’s administrator, as a minimum you will need to carry out the tasks set out below.

• Identifying the estate assets. Banks, financial institutions, pension companies, mortgage providers and so on will need to be contacted to find out what the deceased owned. You will also need to gather accurate date-of-death valuations.
• Preparing tax forms. You will need to identify whether the estate is taxable and calculate the amount of Inheritance Tax (IHT) due, if any. At least some IHT must be paid within six months of the date of death.
• Applying for probate. Probate is the process of proving that a will is valid and that the executor has the right to administer the estate. It usually is needed when the person who died owned property or significant assets in their sole name.
• Closing accounts. Once the Grant of Probate or Letters of Administration is received, it can be sent to banks, life insurance companies and anywhere else the deceased had an account or policy. This will enable you to close the accounts and collect the funds.
• Paying debts. Any debts or liabilities must be paid out of the estate funds. If there isn’t enough cash in the bank, then you must sell assets and property to pay the debts.
• Distributing assets. Finally, once all the liabilities have been paid, the estate can be distributed among those entitled to it. If you haven’t done so already, you will need to hire a solicitor to manage property transfers, deal with trusts and overseas assets and carry out other legal tasks relating to the estate.
• Finalising accounts and tax. Administrators are responsible for preparing full and final estate accounts and sharing these with the beneficiaries. You will also need to make any further IHT payments or reclaim any overpaid Inheritance Tax.

How long does it take to administer an estate?

It is impossible to say exactly how long it will take to administer an estate. It depends on how large and complex the estate is. If the estate includes a lot of assets, property, trusts, overseas assets or a complex tax situation, then it could take a year or longer.

How Osbornes can help with estate administration

The role of an estate administrator should not be taken lightly. You have a duty to administer the estate correctly in accordance with the law and must always act in the best interests of the beneficiaries. You may be financially or personally liable if you don’t follow the correct procedures, and it’s easy to make mistakes.

At Osbornes, we understand this can be a difficult and emotional time, and we are here to help make things easier. We have solutions to support every family and can take on the entire administration process for you or provide guidance and advice when you need it. We will make sure the estate is administered efficiently and by the law, taking away much of the worry and stress of dealing with the administration process. Get in touch to find out how we can help.